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18-P-1404 Appeals Court
JOEL WEISS vs. LOOMIS, SAYLES & COMPANY, INC., & another.1
No. 18-P-1404.
Suffolk. September 11, 2019. - January 23, 2020.
Present: Blake, McDonough, & Hand, JJ.
Independent Contractor Act. Practice, Civil, Directed verdict.
Civil action commenced in the Superior Court Department on January 30, 2014.
The case was tried before Christine M. Roach, J.
Stephen S. Churchill (Brant Casavant also present) for the plaintiff. James W. Bucking (Allison L. Anderson also present) for the defendants. Stephen T. Melnick, Jennifer M. Duke, & Mary K. Sexton, for Massachusetts Technology Leadership Council, Inc., amicus curiae, submitted a brief.
McDONOUGH, J. Joel Weiss filed a single-count complaint in
the Superior Court, alleging that the defendants, Loomis Sayles
1 Loomis, Sayles & Company, L.P. 2
& Company, Inc., and Loomis Sayles & Company, L.P.
(collectively, Loomis), misclassified him as an independent
contractor rather than an employee. See G. L. c. 149, §§ 148B
(§ 148B or independent contractor statute), 150. In the middle
of the jury trial, after Loomis had moved for a directed verdict
and had begun presenting evidence in its defense, the judge
directed a verdict in favor of Loomis, the party with the burden
of proof. We reverse.2
Evidence. In assessing the judge's order allowing Loomis's
motion for a directed verdict, we summarize the evidence in the
light most favorable to Weiss, the nonmoving party, while
drawing all reasonable inferences in his favor. See Donaldson
v. Farrakhan, 436 Mass. 94, 96 (2002). In 2010, a recruiter at
Eliassen Group, LLC (Eliassen), a large information technology
staffing firm, contacted Weiss about certain project-based work
at Loomis, a financial services company.3 Weiss, a software
engineer with significant experience in the financial sector,
was interested in the engagement. After Weiss signed, as
2 We acknowledge the amicus brief submitted by the Massachusetts Technology Leadership Council, Inc.
3 More specifically, Loomis is an asset management company that creates and manages custom investment portfolios for institutional clients. The particular project called for an individual to take over an application called Risk Insite, and to support and update it as necessary. 3
president of JoSol, Inc. (JoSol),4 an independent contractor
agreement (initial contractor agreement) with Eliassen, he
interviewed with Loomis supervisors, Kevin McGuire and Luke
Antolini. A decision was made that Weiss was a good fit for
Loomis.
On August 4, 2010, Loomis entered into a "professional
services vendor agreement" with Eliassen for "Joel Weiss for
technology services." The initial contractor agreement between
Weiss's company, JoSol, and Eliassen ran for three months. The
parties subsequently extended the agreement on several
occasions. The only JoSol employee authorized to provide
services to Loomis was Weiss. On February 1, 2013, Loomis and
Eliassen entered into a second "professional services vendor
agreement" for "Joel Weiss for Technology Services." That
contract, which ran through December 31, 2013, contained
language stating that Weiss was "free to accept engagements from
others during the term of this Agreement, so long as such
actions [did] not impair [his] ability to perform his . . .
services to Loomis Sayles." If Loomis had extended an offer of
4 JoSol, Weiss's preexisting consulting company, had just two employees: Weiss and his wife, Sarah. Weiss opted to contract with Eliassen through JoSol because the corporation-to- corporation arrangement was a better overall financial deal than a direct relationship with Eliassen. Before the Loomis engagement, Eliassen required Weiss to furnish proof that JoSol was a legitimate business. Notably, Loomis never learned of the existence of JoSol. 4
employment, Weiss would have accepted it; Loomis provided its
employees with a more generous benefit package than those
available through JoSol and Eliassen. Weiss, however, was not
given that choice.
In September 2010, Weiss commenced work in Loomis's
technology group. Working in teams, the Loomis managers in the
group created and oversaw projects to meet the needs of the
Loomis investment professionals.5 As a member of McGuire's team,
Weiss worked on a number of these team projects, creating and
fixing information technology applications. Weiss also worked
on several projects of various lengths for other managers,
including one spearheaded by John Gidman, Loomis's chief
information officer (CIO). In total, Weiss worked on at least
fifteen Loomis projects.
Weiss reported, among others, to McGuire. During their
daily interactions, McGuire "would give [Weiss] direction" and
Weiss would bring issues to McGuire. The "powers that be" also
assigned required tasks to Weiss as part of his daily job.
Weiss worked directly with the Loomis employees who used the
applications, assisting with specific issues and upgrades.
5 The investment professionals (portfolio managers, analysts, and traders) made up only thirty-five to forty percent of Loomis's total workforce of 680. 5
Loomis assigned Weiss to a cubicle directly across from
McGuire's office and provided Weiss with a desk, computer,
office supplies, a badge allowing building access, a Loomis
picture identification card, a Loomis telephone number, and a
Loomis e-mail address. Although Weiss had no set work hours,
"the conventional wisdom" was that he should be in the office
during business hours. For the first two years, Weiss worked
five days per week in the office; during his final year, he
worked at home, as did "most of the people [he] knew [at
Loomis]," on Fridays and during holiday periods. When he worked
at home, he used his personal laptop computer, which someone at
Loomis helped him partition to keep his business work separate
from his personal matters. He always alerted his Loomis
supervisor to his whereabouts.
Weiss attended at least a couple of team-wide and project-
specific meetings per week. All members of the team -- Loomis
employees and contractors -- attended the team-wide meetings.6
The contractors frequently communicated with Loomis managers and
worked out the technical details of projects with them. On many
occasions, Loomis converted contractors into employees.
6 Loomis referred to the contractors, among other designations, as "consultants," "developers," "temps," and "vendors." 6
Each week, Weiss submitted time sheets signed by McGuire to
Eliassen, which paid JoSol seventy-five dollars per hour; and
from those proceeds, JoSol paid Weiss a salary.7 Loomis paid
Eliassen $104 per hour for Weiss's services. Loomis approved
some of the contractors' direct requests for rate increases.
In Weiss's first year, McGuire had no objections to Weiss
working overtime, and Weiss was permitted to work as many hours
as he wanted. Toward the end of Weiss's third year, Antolini,
acting on Gidman's instruction, asked Weiss to keep his weekly
hours under fifty. Shortly after that conversation, Weiss was
instructed not to log more than forty hours per week without
prior approval from Gidman.
During Weiss's tenure, Loomis employed forty individuals in
the technology group,8 which had a budget of $50 million
(approximately six to ten percent of Loomis's overall budget).
Loomis also staffed its technology group with eighty to one
hundred independent contractors; many of these contractors
worked full time at Loomis for years. In fact, the Eliassen
7 At some point, Weiss negotiated a four dollars per hour pay raise with Eliassen.
8 The technology development professionals in the group consisted primarily of database engineers, database administrators, and software engineers. McGuire was uncertain whether the individuals performing these services were employees or contractors. There was evidence that the consultants were also unsure whether other workers in the technology group were contractors or Loomis employees. 7
recruiter informed Weiss that his contract was "open ended" and
that he had "never had a consultant finish [at Loomis]." Loomis
had never hired an independent contractor directly; contractors
were required to first set up a contract with a staffing firm
(such as Eliassen).
In the annual reports that Gidman prepared for Loomis's
board of directors, he included the work of all the service
providers among the achievements of the technology group. The
names of the independent contractors, including Weiss, appeared
in the organizational charts contained in those reports.
Moreover, in a 2011 "organizational realignment" chart sent to
the entire company, Gidman listed the names of the independent
contractors, including Weiss, with the employees; he did so in
order to communicate the full extent of the "expertise and
resources" that could be utilized by the Loomis technology
group.
For four weeks in December 2011, two weeks in January 2012,
and three weeks in June 2012, Weiss worked on a cash flow
project for the Commonwealth of Massachusetts. While working
forty to sixty hours per week at Loomis, Weiss spent an
additional ten to twenty hours per week on the Commonwealth's
project. In September 2013, without explanation or notice,
Loomis terminated Weiss. Weiss subsequently collected 8
unemployment benefits through JoSol. Loomis was JoSol's last
business engagement.
Discussion. 1. Standard of review. We review the
allowance of a motion for a directed verdict to determine
whether "anywhere in the evidence, from whatever source derived,
any combination of circumstances could be found from which a
reasonable inference could be drawn in favor of the plaintiff"
(citation omitted). Claudio v. Chicopee, 81 Mass. App. Ct. 544,
546 (2012). A directed verdict in favor of the party with the
burden of proof, here Loomis, should be granted only in
"exceptional" cases.9 Brunelle v. W.E. Aubuchon Co., 60 Mass.
App. Ct. 626, 630 (2004).
2. Misclassification claim. "Under § 148B (a), an
individual who performs services shall be considered to be an
employee, for purposes of G. L. c. 149 and G. L. c. 151, unless
the employer satisfies its burden of proving by a preponderance
of the evidence that '(1) the individual is free from control
and direction in connection with the performance of the service,
both under his contract for the performance of service and in
9 We have reminded trial judges that in close cases, "it is sound practice to deny the motion and to give the case to the jury, which may render the question academic by returning a verdict for the defendant. If the jury finds for the plaintiff, the trial judge may, upon a motion for judgment [notwithstanding the verdict] reconsider and decide the issue previously presented by the motion for a directed verdict" (citation omitted). Chapman v. Katz, 448 Mass. 519, 530 n.25 (2007). 9
fact; and (2) the service is performed outside the usual course
of the business of the employer; and (3) the individual is
customarily engaged in an independently established trade,
occupation, profession or business of the same nature as that
involved in the service performed.'" Somers v. Converged
Access, Inc., 454 Mass. 582, 589 (2009), quoting G. L. c. 149,
§ 148B (a). Thus a putative employer like Loomis may rebut the
statutory presumption of employment by establishing by a
preponderance of the evidence the three prongs of an independent
contractor relationship. See G. L. c. 149, § 148B (a) (1)-(3).
If Loomis failed to satisfy even one statutory prong, Weiss was
Loomis's employee. See Somers, supra at 589-591. The
independent contractor statute must be applied in a manner that
furthers its purpose to protect workers "from being deprived of
the benefits enjoyed by employees through their
misclassification as independent contractors." Id. at 592. As
a remedial statute, § 148B is entitled to a liberal
construction. See Depianti v. Jan-Pro Franchising Int'l, Inc.,
465 Mass. 607, 620 (2013).
a. Standing. At all relevant times, Loomis's primary
defense was that Weiss, as an individual, lacked standing to
bring a misclassification claim. Loomis reasons that because it
obtained Weiss's engineering services through its legitimate
business-to-business relationship with Eliassen, and Weiss 10
voluntarily provided services through JoSol, his preexisting
corporation and employer, § 148B was inapplicable. See Chambers
v. RDI Logistics, Inc., 476 Mass. 95, 108-109 (2016). Weiss
counters that Loomis contracted for the individual services of
Weiss, and used an intermediary, Eliassen, to evade its
statutory obligations to its long-term "consultants." The trial
judge did not reach the standing issue; she grounded her
directed verdict ruling on Loomis's establishment of Weiss's
independent contractor status as a matter of law. We conclude
that the evidence was sufficient to support a finding that Weiss
had standing as an individual to assert a misclassification
claim under § 148B.10
Here, the evidence demonstrated that Loomis contracted with
Eliassen not for the services of JoSol, but for "Joel Weiss for
technology services." Asked why Weiss's name appeared on the
contract, Gidman explained that "the provider of the services is
tremendously important [to Loomis] because not all people are
the same . . . [and Weiss had] a specific set of expertise and
experience [Loomis was] looking for." In fact, Weiss was the
only JoSol employee authorized by Loomis to perform the services
10As a threshold matter, we note that the Supreme Judicial Court has indicated that "[t]he statutory reference to 'individuals who provide services' . . . does not expressly exclude individuals who provide services through a corporation." Chambers, 476 Mass. at 109. 11
in issue. Weiss provided his personal services to Loomis for
three years, working forty to sixty hours per week. Due to time
constraints and the contractual restriction that Loomis imposed
on Weiss's work for others, a jury could find that the services
of Weiss, the alleged independent contractor, were not "actually
available to entities beyond [Loomis], even if they [were]
purport[ed] to be so." Chambers, 476 Mass. at 109, quoting
Advisory 2008/1, Attorney General's fair labor and business
division. Although other factors could support a finding of a
legitimate business-to-business relationship exempt from
liability under § 148B, the factual issue should have been
submitted to the jury.11 See Chambers, supra at 96, 108-109
(treating standing as question of fact).
b. Independent contractor status. Weiss argues that the
jury could reasonably have found that Loomis failed to establish
one or more of the statutory prongs of § 148B. We agree.
11All parties agreed that Loomis, Eliassen, and JoSol were legitimate businesses. The fact that Loomis obtained Weiss's services through a contract with a legitimate staffing company did not automatically render § 148B inapplicable. See Sebago v. Boston Cab Dispatch, Inc., 471 Mass. 321, 328-329 (2015) (noting that employer end runs around their G. L. c. 149 obligations through contractual arrangements with third parties are prohibited); Depianti, 465 Mass. at 622 (finding that language in G. L. c. 149, § 148B [a] [1] "does not reflect any legislative intent to allow an employer to insulate itself from liability for misclassification by causing or creating another entity to contract with its employees"). 12
i. Freedom from control and direction. Based on the
evidence presented, the jury could have reasonably found that
Weiss was subject to Loomis control and direction, both under
his contract for the performance of the services, and in fact.
The issue turns on whether Loomis had the right to supervise,
direct, and control the details of Weiss's performance, or
whether Weiss was free from supervision "not only as to the
result to be accomplished but also as to the means and methods
that are to be utilized in the performance of the work"
(citation omitted). Athol Daily News v. Board of Review of the
Div. of Employment & Training, 439 Mass. 171, 177 (2003).
Here, JoSol's contract with Eliassen restricted Weiss's
ability to perform services for others that might have
interfered with his work at Loomis. Before agreeing to the
engagement, Loomis supervisors interviewed Weiss. McGuire gave
Weiss assignments and directions, and actively supervised the
performance of Weiss's services from McGuire's office directly
across from Weiss's cubicle. Weiss brought McGuire his "issues"
and attended meetings where progress was discussed. E-mails
established that Weiss and McGuire frequently communicated and
discussed the technical details of projects. As part of his
daily job, Weiss performed required tasks for other Loomis
managers. Loomis also provided Weiss with a workstation and the
supplies and equipment he needed to perform the services. In 13
order to get paid, Weiss was required to submit his hours weekly
to his supervisor at Loomis for approval. Loomis paid Weiss by
the hour, not by the project, and had the authority to grant
raises. Loomis monitored and limited Weiss's hours, and
terminated Weiss at will without reason. This evidence was
sufficient to support a finding of control under the Athol Daily
News standard, precluding a directed verdict in Loomis's favor.12
See Athol Daily News, 439 Mass. at 177.
ii. Usual course of business. In assessing whether
services are performed outside the usual course of business of
the company, one relevant factor is whether the services are
necessary or merely incidental to the business. See Carey v.
Gatehouse Media Mass. I, Inc., 92 Mass. App. Ct. 801, 807
(2018). "[A] service need not be the sole, principal, or core
product that a business offers its customers . . . in order to
be furnished in the usual course of that business." Id. at 808.
"[T]he manner in which a business defines itself" is another
relevant factor in the usual course of business inquiry. Id. at
805. The Supreme Judicial Court has illustrated the concept of
services provided within the employer's usual course of business
The language of JoSol's contractor agreements with 12
Eliassen, while relevant, is not dispositive on the right of control issue. See Boston Bicycle Couriers, Inc. v. Deputy Director of the Div. of Employment & Training, 56 Mass. App. Ct. 473, 483-484 (2002). 14
with three examples: an art instructor providing services on a
"regular or continuous basis" within an art museum; musicians
performing as a "usual and customary activity" of a beer bar;
and an organist playing music as a "usual part of" a funeral
home's business (citations omitted). Athol Daily News, 439
Mass. at 179. We conclude that the jury applying these
principles could have found that Weiss performed services within
the usual course of Loomis's business.
Loomis is in the business of managing and investing money
for its clients. The jury could have found that Loomis
maintained a large technology group as part of its normal
operations; and that Loomis staffed it on a regular and
continuous basis with a significant number of independent
contractors. Indeed, according to one Eliassen recruiter, the
contractors never finished at Loomis. The contractors provided
the technology services needed by Loomis's investment
professionals, working full time for years on assignments from
their Loomis managers. There was intermingling within the
technology group to the point that neither Loomis employees nor
contractors knew whether they were interfacing with fellow
employees or independent contractors. 15
Moreover, Loomis publicly advertised the vital role played
by the technology group in the success of its business.13
Gidman, Loomis's CIO, acknowledged that the highly regulated
investment industry and the sophistication of its clients
"place[ed] demands" on Loomis for a deep infrastructure;
information and technology is a required component of that
infrastructure; and that the work of the technology group is
"important to the operation of Loomis." Finally, Gidman
specifically included the services performed by Weiss and the
contractors among the accomplishments of the technology group in
the annual reports to the board of directors. This evidence
would have amply supported a finding that Weiss performed
services within the usual course of Loomis's business.
iii. Independently established business. "The critical
inquiry under this prong is whether 'the worker is capable of
performing the service to anyone wishing to avail themselves of
the services or, conversely, whether the nature of the business
13On its website, Loomis listed technology as a specific group within the organization. Under the "Careers" section, Loomis described the role served by the group as follows: "Technological leadership and an ongoing commitment to operating efficiency can significantly impact a firm's financial success. With that mission in mind, the technology group partners with every person, team and department at Loomis Sayles to ensure our most efficient processes and best tools are in place for the task at hand. The ideal candidate for positions in technology will have the knowledge and experience needed to develop and/or support technology solutions throughout the company." 16
compels the worker to depend on a single employer for the
continuation of the services.'" Sebago v. Boston Cab Dispatch,
Inc., 471 Mass. 321, 336 (2015), quoting Athol Daily News, 439
Mass. at 181. Stated differently, the question is whether at
the time the services were provided, the individual was "wearing
the hat" of the putative employer or the "hat of his own
independent enterprise." Boston Bicycle Couriers, Inc. v.
Deputy Director of the Div. of Employment & Training, 56 Mass.
App. Ct. 473, 480 (2002). "Essentially, [this prong] requires
the [putative employer] to demonstrate that the worker is
performing services as an entrepreneur" (citation omitted).
Subcontracting Concepts, Inc. v. Commissioner of the Div. of
Unemployment Assistance, 86 Mass. App. Ct. 644, 649 (2014). The
determination whether this statutory prong is satisfied "must be
based upon a comprehensive analysis of the totality of relevant
facts and circumstances of the working relationship. No one
factor is outcome-determinative." Boston Bicycle Couriers,
Inc., supra at 484. We need not repeat the evidence that would
establish that Loomis did not, as a matter of law, necessarily
meet its evidentiary burden with respect to this prong. Suffice
it to say that a jury could have found that in reality, Weiss
was not free to provide services to anyone of his choice; and
that the hat he wore for three years through fifteen different
projects had a Loomis label on it. Of particular significance 17
was the restriction inserted by Loomis in the contract that
Weiss was only free to work for others "so long as such actions
[did] not impair [his] ability to perform his . . . services to
Loomis Sayles."
In sum, in order to prevail, Weiss had to prevail on only
one of the statutory prongs, and there was evidence from which
the jury could have found in favor of Weiss on each of the
statutory prongs. At the time the trial judge granted the
motion for a directed verdict on the misclassification claim,
Loomis had not proven that Weiss was an independent contractor
as a matter of law. The verdict was directed in error. A new
trial on the misclassification claim will be required.
Conclusion. The judgment on the directed verdict is
reversed and the case is remanded to the Superior Court for
further proceedings consistent with this opinion.
So ordered.